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Sureties Fight Recovery Fund in the Alabama Senate

Thursday, March 13, 2014

Alabama HB 143, as introduced, would have revised the bond
requirement for master plumbers and master gas fitters.Existing law requires a $2,000 bond to be
filed with the judge of probate in the county of the plumber or gas fitter’s
principal place of business.The bill
would have increased that bond to $15,000 and converted the requirement into a
statewide bond. The bill prohibited
cities and counties from requiring a bond to be furnished if the plumber or gas
fitter has a bond with the Alabama Plumbers and Gas Fitters Examining Board. The bill was amended
on the House floor right before it passed, and HB 143 now would repeal the
current bond requirement and establish a recovery fund for consumers.The
bill also now provides that participation in the recovery fund would be in lieu
of any performance bonds required by a city or county.

HB 143 was heard yesterday in committee in the Senate.The Senate committee previously had passed SB
150, which is identical to HB 143, as introduced.The Senate committee agreed that the intent
of HB 143 and SB 150 was to increase the bond amount and streamline the license
and bonding process for the bond principals. Concerns had been expressed to legislators
regarding the additional bonds that plumbers and gas fitters had to obtain
under various local government ordinances. Another concern was that the bond amount was
too low to achieve the intended purpose of the bond, which led to consideration
of a recovery fund as an alternative method of consumer protection.

The Senate committee removed the recovery fund from HB 143
and instead amended HB 143 to conform to SB 150 with an increased bond amount
and conversion of the bond requirement to a statewide bond.SFAA worked with AIA on this bill and we know
that several of our individual member companies also were actively engaged on
this bill. We also have asked that the
references to this license bond as a “performance bond” in the bill text to be
corrected.